Lafley's Search for New Marketing Model

Procter & Gamble chairman/CEO A. G. Lafley told 2,000 P&G executives in early November, “We need to reinvent the way we market to consumers. We need a new model. It does not exist. No one else has one yet. But we need to get going now.”

The model already exists. I describe it in my book, Ageless Marketing. It is a model based on tenets of human behavior rather than on rules of statistical math and subjectively wrought notions about markets and consumer behavior.

While virtually everyone in business would agree that marketing is about influencing consumers’ behavior, behavioral science has such a de minimus standing in marketing that a person can earn an MBA in marketing without a single course in behavior.

The new marketing model that  P & G’s Lafley pines for must be based on a better understanding of human behavior than is characteristic of marketing.

At the bottom of page 13  in Ageless Marketing I describe why a deeper understanding of human behavior has become crucial in marketing.

The bitter truth that few people in marketing are up to swallowing is that marketing is far less a well-formed discipline than a vocational category defined largely by opinion – opinion that is endlessly rationalized by consumer research whose results consumer behavior fails time and again hold

Almost more so than in any other profession I know the words of mathematician Valentine in Tom Stoppard’s play Arcadia, when Valentine reflects on the scale of change that overarches our world today apply to marketing:

The future is disorder. A door like this has opened up five or six times since we got up on our hind legs. It’s the best possible time to be alive when almost everything you thought you knew is wrong.

How many of us in marketing have the stomach for admitting that we work in a profession in which "almost everything you thought you knew is wrong" -- a profession in which batting averages would not qualify many of us for even the minor leagues. After all, by some estimates, as much as 94% of all new products fail to survive year one in the marketplace. I know of no other profession where such a batting average would be tolerated.

Comments

[Atare E. Agbamu]

David --
Please send copies of your book to Mr. Lafley and his top aides as holiday gifts. After reading it, they will see more clearly.

-- Atare Agbamu

[David Wolfe]

Atari:

In fact not only did I send a copy of Ageless Marketing to Mr. Lafley, but a friend called me yesterday to tell me that he had sent a copy to Mr. Lafley as well, with a cover letter saying that the model he's looking for does exist!

Thanks for your suggestion.

[V.A. Baker]

General Motors’ poor leadership goes on. Currently much of the official GM self-assuring verbiage is being spouted by Mark LaNeve—as Rick Wagoner remains CEO and cheers Mark’s message. (I apologize if this sounds harsh, but time-wasting noise and poor decisions are devastating to GM, as Toyota in turn cheers for Wagoner . . . and stuffs itself with share.)

Personally, I and parents across the U.S. say replace the GM hierarchy. Send the leadership the way of Carly. Until then—our message to GM—leave product mix alone. Simply sell a lot more units and stop the bankrupt strategy of profit-destroying rebates and discounts and zero interest loans.

Now for the metrics-based approach the GM board should be looking at, with or without Mr. LaNeve and Mr. Wagoner: HSeverywhere. At pennies on the dollar, by partnering with HSeverywhere, GM would stand to win the loyalty of tens of millions of parents. Many of those parents, desperately appreciative, would begin to visit GM showrooms. (Perhaps the GM board needs to hire me.) Without such loyalty by parents, as market data tell us year after year (after year, etc.), those tens of millions of potential buyers are likely to settle for competing brands. AND YET WHEN PARENTS, VOLUNTEERS AND I ATTEMPT TO REACH GM DECISION MAKERS, WE HEAR . . . NOTHING.

A RARE EXAMPLE, ALBEIT FAR DOWN THE LEADERSHIP CHAIN, IS A REPLY TO THE FOLLOWING E-MAIL I RECENTLY SENT TO A PARTICULAR INDIVIDUAL AT A MOST-RELEVANT GM DEPARTMENT:

[NAME OF INTENDED GM RECEPIENT DELETED],

If you will, please take a moment to contemplate the implications of the following, an innovative win-win approach to both help the nation’s competitiveness . . . and recast GM sales, margins, market share and dozens of other metrics.

AS A FUNCTION OF THE SUCCESS OF WHAT WE REFER TO AS THE HSEVERYWHERE “MODEL,” LEGIONS OF PARENTS OF THE NATION’S ROUGHLY 100 MILLION SECONDARY SCHOOLERS (HIGH SCHOOL AND MIDDLE SCHOOL) AND YOUNGER WILL BEGIN TO “THINK GM.” WHAT MORE COULD GENERAL MOTORS CORP. AND ITS NETWORK OF DEALERSHIPS ASK?

You might enjoy glancing at the digital attachment of the authors of “No Excuses” as you decide whether GM, its dealers, etc., might have a level of interest in HSeverywhere.

For pennies on the advertising dollar GM can become a name mentioned tens or even hundreds of millions of times a day in every town and city across the U.S. Results of this renewed and increased “awareness” of GM will include the metric of the number of new customers each day who will walk into the showrooms of GM dealers—as HSeverywhere students across the U.S. directly and indirectly encourage their parents to buy GM. Duly appreciative parents (appreciative of HSeverywhere) will include those who may otherwise have cared little a particular car maker or brand, and others who have “always” bought a Toyota, a Hyundai, a Ford, a BMW. . . . (Dr. Panke, by the way, and BMW’s legal department have requested the HSeverywhere material.)

● Not yet launched, the pre-launch “Internet within the Internet” HSeverywhere model is designed to reengineer the productivity of secondary education.

● One of the top 10 Internet service providers in the U.S. has reviewed the HSeverywhere material and has made an intriguing offer to host. Why? The ISP would like to become number one.

Grateful parents will stand to become not just GM's friends, but friends who buy cars, trucks and SUVs. Parents know—they do not have to be told—that math and science results on the nation’s report card and results on SATs, etc., as well as international tests pitting U.S. students with those of the other industrialized nations, are all less than stellar. And parents know that many students could do better. For some Americans doing better may mean finishing high school within a four-year period (or finishing high school, period) and for others it may mean sudden inspiration to begin thinking about someday attending graduate school in one of the STEM subjects (science, technology, engineering or mathematics).

At first blush, there may seem to be little relationship or applicability between helping K-12 students (toddlers, too) and hiking GM market share. However, the link—parents—will be powerful enough to necessitate adding third shifts at currently troubled GM plants and, separately, will tackle the issue of thinning margins.

Although we’ve had no trouble finding support in other quarters such as the above-indicated ISP, our volunteers and I have long been trying to speak with someone at General Motors.

We look forward to hearing from you.

Best regards,

V.A. Baker

HSeverywhere
4199 Mechanicsville Tpk.
Mechanicsville, VA 23111
(804) 779-3611

PS: The digital photograph attached shows the authors of “No Excuses.” Seated is Dr. Abigail Thernstrom and standing to the far right is her husband and co-author, Dr. Stephan Thernstrom. I’m the guy trying to squeeze in on the left. Others shown are volunteers and their family members.

THE OUTCOME OF SENDING THE ABOVE E-MAIL:

A pleasant-speaking gentleman at GM, though not the person to whom I sent the e-mail, was given the task to contact me. Telephoning, he soon asked what was so magical about HSeverywhere and how did it work and what was the Internet within the Internet? The gentleman told me he knew all about the Internet and ISPs but did not fully understand how HSeverywhere would work. At some point I described the Internet within the Internet approach of HSeverywhere and tactfully (very tactfully, I thought) related that one of the top 10 Internet service providers in the U.S. had no trouble understanding the process, thus its proposal to host. The GM gentleman told me he would need to understand a whole lot more before he would allow GM to invest its time to weigh/evaluate how GM would benefit. I responded that I would be willing to provide the same in-depth material that we provided the ISP, the material used by the ISP in making its decision. Again, his reply was that before GM invested that kind of time (to study 140 pages) it must first be quite sure that the time would be justified. My thought (but only to myself): Your bond rating just dropped, your share has been dropping for years. . . . Surely you have the time to rethink your conventional wisdom. Surely you see the urgency of seeking to decidedly appeal to a huge part of the nation’s car-buying public: parents.

So, following the conversation, I sent another e-mail with more detail but with nothing proprietary (no non-disclosure having been signed). But this person had long since dismissed possibility, accepting the inevitable.

Thus, as I suggest above, replace the whole bunch. Start at the top, where the C.F. Fraleigh-era verbiage and damage (not that I know the extent of Fraleigh’s influence) appears to have metastasized. Toyota could not have planted a greater anti-marketing calamity: as GM’s wonderful heritage slips another notch.

Regards,

V.A. Baker